E&OE..................
At the beginning of the twenty first century, Australia is an active player in a world vastly changed from that which existed even a decade ago. It's a world no longer divided along defined bi-polar lines and one in which the United States holds a pre-eminent position, both economically and militarily.
When the Coalition government came to office five and a half years ago, we did so with the conviction that Australia's foreign policy was unbalanced and unsuited to this changed environment.
We recognised that the end of the cold war fundamentally altered the global strategic environment and that, in the area of national security, regional tensions and uncertainty had replaced the traditional balance between two super powers.
Equally, we were determined to respond to the trends of globalisation, increasingly fuelled by advanced communication and technology, and the massive and rapid flow of international capital.
For that reason, we were convinced that a preoccupation with one particular region, at the expense of others, was ill conceived and at odds with this country's national interest.
We felt that it was not necessary to choose between our relationships with Asian countries, and those in Europe and North America - to choose between our history and our geography.
We were convinced that it was not only possible - but essential - for Australia to build and maintain links with all the major centres of global power and influence, while ensuring that key regional relationships were kept vibrant and strong.
Subsequent events were to vindicate that approach.
Australia's experience in the East Asian financial crisis was a watershed in defining how and where we fit in the international system - and in confirming the fundamental strength of the government's approach.
It has also revealed the risks of adhering to a static framework, and of the folly of rigidly defining the focus of a nation's international attention. This country's successful response to that crisis has displayed the benefits of setting balance and flexibility as the benchmarks of Australia's international relationships - both economic and otherwise.
Immediately before the crisis 60 per cent of Australia's merchandise exports were directed to East Asia.
There was an expectation in late 1997, as one after another of the economies to our north shuddered to a halt, that Australia would be badly damaged.
Yet Australia continued growing strongly throughout and beyond the crisis. It recorded across the decade of the 1990s one of the strongest levels of growth among all developed countries.
A flexible exchange rate and his government's sound economic management and bold reforms lie at the heart of the explanation. They have given Australia strength and standing in a world of rapid economic change. We have consolidated our fiscal position, produced low interest and inflation rates, overhauled the taxation system and modernised industrial relations.
In addition, over the past two decades, Australia has opened its markets to trade, reformed the financial sector, increased competition in the markets for goods and services and improved flexibility and productivity in the labour market.
Within that framework our exporters demonstrated great resilience and enterprise in the wake of the crisis, expanding their sales strongly in non-Asian markets such as North America, Western Europe and the Middle East.
The government has matched this effort by a quite deliberate strategy to strengthen links with key parts of the globe. The right domestic policies, combined with certain national attributes, have provided Australia with the capacity to contend with the challenges and disciplines of the globalised economy.
These include our robust national political institutions, an impeccable commitment to the rule of law, high standards of corporate governance, and a private sector and wider community that are confident in dealing with the new information age.
Australia stands confidently positioned to succeed in an era of globalisation - both to handle its challenges, and to seize its opportunities.
It is my firm belief that globalisation is a process that provides major opportunities for this country, and for all countries, to grow and improve the standards of living of their peoples. Importantly, it provides opportunities for the poor as well as the rich.
The opponents of globalisation, the self-styled champions of the poor and the marginalised, speak for no one but themselves. They certainly do not speak for the world's developing nations. They seek to deny those countries the benefits of more open markets for the goods they produce; of international investment flows and the jobs they create; and of technologies and the new industries they stimulate.
It is no coincidence that those developing countries that grew fastest over the last forty years and achieved the greatest reductions in poverty are those that developed sound institutions, forcefully pursued export opportunities and aggressively utilised the market openings made available to them.
For instance, in 1960, South Korea's per capita GDP was the same as Algeria's, and its third largest export was wigs! Today, even after the Asian crisis, South Korea is the world's thirteenth largest economy and its third largest export is computers, earning its citizens more than $US 7.2 billion per year.
Developing countries that are integrated with world markets have seen average incomes rise, and inequality fall, for the majority of their population. Countries open to international trade have achieved double the annual average growth of other developing countries that have not.Opponents of globalisation are arguing for a return to protectionism. On the contrary, developing countries need more, not less, market liberalisation to meet their needs.
Many developing countries are denied the opportunity to trade their way to sustainable growth and higher 'core labour standards' because of the barriers in much of the developed world to their exports, particularly in agriculture.
According to a World Bank study to be released later this year, current levels of protection in developed countries cost the developing world more than USD100 billion - that is twice the amount of total aid they receive.
Although the nation-wide benefits of globalisation are immense, some groups of people can be left behind by economic and technological change. It is an important part of a country's successful management of the process that the needs of these people are met.
Governments must speak out about the reality of globalisation, and carry their people with them in meeting its challenges. Failure to do so is ultimately a failure of national trust and responsibility.
Ladies and Gentlemen:
In the broadest sense, Australia's international relations shape the prosperity and security of Australians.
First, the basics need to be right. Particular emphasis needs to be given to the self-reinforcing links between the strength of the national economy, the effectiveness of foreign and trade policy, and capabilities of the defence force.
I have already underlined the importance of a strong and prosperous domestic economy able to withstand international pressures, to take advantage of global opportunities, and to assist other nations in times of need.
We also need to keep our alliances and key relationships in good order and, by doing so, have greater influence than if we acted alone.
We need to work to ensure that our region, the part of the world that has the most direct bearing on our fortunes, is as stable and prosperous as we can make it.
And we need to have an armed force that has the capacity to defend us if necessary, and to act with others in support of regional stability. The government has acted decisively on this front with a commitment to increase defence spending by $23 billion over the coming decade.
Second, we need to find the right balance in the conduct of our foreign relations between the principles we believe in, and a pragmatic and clear-eyed defence of the national interest. Our commitment to democracy, to fundamental human rights, to freedom of speech, freedom of the press, and the independence and authority of the rule of law must not be compromised. That said, our relations with countries having different cultural and political traditions, must be based on mutual respect. We will give them the same respect and acknowledgment of sovereign authority that we ask be given to us.
There will be times, such as in East Timor, when we must reach out to assist the vulnerable who need and deserve our assistance.
Key Relations
The maintenance of strong bilateral relationships remains a cornerstone of this government's foreign policy approach.
Asia is, of course, of vital importance to us - it lies at the forefront of our policy focus. The region has huge potential and, despite recent difficulties, has taken some major strides down the path of political and economic reform.
The nations of Asia matter because they are important political partners with whom we have worked for many years to build a more stable and secure region. They matter because of where they are. Their proximity inextricably links their future prosperity and security with ours. And they matter because of what they are - our largest export markets and the source of much of our investment and imports.
Japan is Australia's key economic partner, our best customer by far, and our closest diplomatic partner in Asia. We have watched with concern the malaise of the Japanese economy and been encouraged by the determination of Prime Minister Koizumi to overhaul Japan's political and economic structures.
The fact that there are no major problems in the economic and political relationship between Australia and Japan should not be cause for complacency.
Prime Minister Koizumi and I agreed that we must be attentive and vigorous in ensuring that this key relationship is kept in good repair. As part of a broader effort to this end, we will continue to outline the benefits of a bilateral trade and investment facilitation agreement with our Japanese friends.
China's growing influence and economic strength is giving it a greater say in the region and the world. We value the positive role China can play. The relationship between an increasingly confident China and a globally preponderant United States is the key to stability in the Asia Pacific region. Australia is a close ally of the United States; we have a fast-growing economic partnership with China. We have a major stake in China's successful integration into the world economy, and in seeing these two powers working together for the common good.
Australia's own bilateral relationship with China is more productive, realistic and sustainable than at any time since the establishment of diplomatic relations in the seventies. We are direct with China about differences in values and seek to manage these differences sensibly. We have said clearly to China that we will adhere to our One China policy and have resolved differences of interpretation with firmness and courtesy. Both we and China are keenly aware of the potential benefits of strategic economic cooperation, including in key sectors like energy.
The relationship we have with the United States is the most important we have with any single country. This is not only because of the strategic, economic and diplomatic power of the United States. But of equal, if not more significance, are the values and aspirations we share. Our fifty-year-old alliance retains its relevance and vitality in the post-Cold War world and makes an important contribution to stability in our region. It gives us access to technology and information that strengthens our ability to pursue our interests. It showed its worth in the events surrounding the East Timor crisis. And, as the recent visits by Secretaries Powell and Rumsfeld reminded us, Australia is of diplomatic and strategic importance to the United States.
Our relationship is more than a security alliance. It is based on ties of friendship built up through common struggle over the century against threats to security and freedom in many parts of the world.
My visit to the United States in a little over a fortnight's time will be an valuable opportunity to formally recognise the significance of the ANZUS alliance and its ongoing relevance. It will also allow us to explore new ways of strengthening an already vigorous relationship, particularly in the trade area.
The European Union is a major economic player in the world and remains vital to our interests.
It is Australia's largest economic partner - our largest merchandise trading partner, our largest market for services exports, our largest source of foreign investment and Australia's second largest investment destination. Its influence stretches far beyond its borders, shaping the institutions of the countries of the former Soviet Union, Africa and the Middle East.
Making Australia's voice heard in Brussels is one of the most important diplomatic tasks we face.
Closer to home, Indonesia's transition to a modern, inclusive, decentralised democracy after thirty years of autocratic and centralised rule is one of the most momentous global developments since the fall of communism. Its stability and well being are vital for Australia, our region and beyond.
We will give Indonesia our attention, respect and assistance. Having frankly acknowledged the inevitable political strains over East Timor, we are ready to move to a new phase in the bilateral relationship.
I hosted President Wahid's visit to Australia in June this year - the first by an Indonesian president to Australia for more than a quarter of a century. And I responded swiftly and positively to President Megawati's generous invitation to visit Jakarta - the first by a foreign head of government since her election.
The openness and candour now being demonstrated between us augers well for a future relationship based on what I have termed 'positive realism'. This should not be a relationship burdened by the kinds of unrealistic expectations that featured so prominently at certain times in the past. Rather it should be based on a realistic appreciation of the differences between our two societies and cultures, but positively focussed on our many shared interests and on a mutual respect for each other.
Regional Stability
Australia's security environment is affected by increasing instability and unpredictability in our near Pacific neighbourhood. We have a substantial and special responsibility in the vast expanse of the South Pacific. A number of these countries face formidable challenges. The problems are complex - the breakdown of law and order, severe social stresses within complex communal structures, and the uneven course of economic and social development.
We have provided and will continue to provide strong support for Prime Minister Morauta's economic and political reforms in Papua New Guinea. This country remains a special place for Australia, one for whom we retain a unique interest and enduring responsibility.
We have shown commitment and perseverance in Bougainville to good effect. In the Solomon Islands we moved quickly to deal with the crisis of spiralling civil war. And in Fiji we have worked hard for the peaceful reinstatement of constitutional democracy.
Many of these small island states are economically vulnerable and politically fragile. They will need support from Australia and others, including the United Nations, the Commonwealth, Europe and other donors.
Yet, only the countries of the South Pacific can find the solutions. Australia cannot, nor would we attempt to determine the course of events in the region. We will help where we can, and generously. But our role in the South Pacific must be based on recognition by the countries of the region that independence means taking responsibility for their own destinies and a commitment by their governments to work in the best interests of their people.
Global Engagement
The resources and attention of the government must also focus on global issues that affect the lives of Australians and further the values that they believe in. I have called on the United Nations to focus on its core strengths and responsibilities, including the peaceful resolution of disputes, disarmament, human rights and the relief of suffering and want.
Australia has been a steadfast and important supporter of the United Nations since its establishment. Given our support for UN operations throughout the world and particularly in East Timor, none could doubt our commitment to remain so. We are keen however to work with others to ensure it is an organisation well structured to meet the challenges of the future and that the views of democratically-elected governments are given sufficient weight.
A decade has passed since the end of the Cold War. The strategic environment has changed, and we no longer live with the threat of superpower confrontation. But the threat posed by nuclear, chemical and biological weapons remains. And the continuing proliferation of ballistic missiles, which can be used to deliver the weapons of mass destruction over great distances, is a cause of concern not just to the United States, but also to Australia, Russia, and many other countries.
Consequently we understand the US intention to develop a new security doctrine that combines offensive and defensive elements to help counter this threat. We welcome and encourage the dialogue that the United States is pursuing with its allies, and with Russia and China, on missile defence and on ways to enhance global strategic stability.
Much remains to be done in the area of arms control where Australia has played a pivotal role in the negotiation of the Comprehensive Test Ban Treaty, and in addressing the problems of land mines, and biological and chemical weapons.
The international negotiations on climate change are a major foreign and domestic policy challenge for Australia. We occupy a unique place internationally, being both a developed country and a net exporter of energy.
I am pleased that the most recent round of negotiations made unexpectedly good progress.
The burden of scientific evidence is overwhelming - the nations of the world must take action to reduce or mitigate their emissions of greenhouse gases. The government continues to maintain that Australia must be part of an equitable global understanding on climate change. I emphasise the need for global action. The problem is not one that can be divided along diplomatic lines, like groupings at a convention. Developing and developed countries must be part of the solution. And it is self evident that the involvement of the United States is critical.
Australia will remain an active participant in any organisation that seeks to further parliamentary democracy and economic prosperity.
In October this year, in Brisbane, Australia will host the Commonwealth Heads of Government Meeting, the largest gathering of world leaders ever held in this country. The Commonwealth is not a rich countries club. It is a dynamic international organisation of over 50 countries, most of them developing nations, which brings together one third of the world's people with a shared heritage and values.
The Commonwealth played a crucial role in decolonisation, dismantling apartheid in South Africa and returning Nigeria to civilian government. It is working for a return to democracy in Fiji and for stability in the Solomon Islands. Many of its members are small states, struggling with basic problems of building democratic governments and fighting against corruption. The Commonwealth has a proud record in addressing the needs of these small states and ensuring their voices are hears in international forums, like the United Nations.
The Brisbane Commonwealth Heads of Government Meeting will tackle practical issues of good governance, economic development, poverty reduction and international peace and cooperation.
Concerns have been expressed at the possible attendance of President Mugabe at the Brisbane meeting. I can understand those concerns. The exclusion of Zimbabwe from CHOGM or suspension from the Commonwealth is ultimately a matter for the Commonwealth to decide.
But the Australian government has been very deeply troubled at the deterioration of law and order in Zimbabwe, and we have made clear the need to uphold the rights of all Zimbabweans, black and white.
It is disappointing that Zimbabwe has refused to receive the ministerial mission proposed by the Commonwealth Ministerial Action Group. We will be actively supporting other international efforts to address some of the problems facing that country.
Trade Relations
I said earlier that flexibility and responsiveness to rapidly changing conditions must remain the hallmark of our foreign policy and this is particularly true in regard to Australia's trade relations.
Our exporters are now more successful than ever - assisted by a competitive Australian dollar and the tax reforms put in place last year. In 2000 Australian exports grew by 25 per cent to reach a total value of $143 billion, the best export growth for 21 years.
Australian exporters have a right to expect their government will be as committed and as creative in finding solutions, as they themselves are. We will not be hamstrung by ideology in the trade arena, but will pursue our economic interests internationally in a clear sighted and flexible way.
Our aims remain clear and unambiguous - to open markets for Australian goods and services and for fair and transparent trading arrangements. And we will work through whatever medium will achieve those ends.
We continue to give the strongest support to the multilateral trade rules of the World Trade Organisation. This is not, as I have said, because of an ideological fixation on multilateralism. It is because those rules, though imperfect, provide an important protection against the unfair, and sometimes predatory behaviour of others.
The failure to launch a new round of multilateral trade negotiations at Seattle in 1999 was a great disappointment for Australia. But we will not be deterred. We remain one of the most active proponents of a new round with the prospect it offers of fairer rules for trade in agriculture and better opportunities for other Australian goods and services. We will be arguing energetically for WTO members to agree on the launch of a round when they meet in Doha in November this year.
We are also making active use of the WTO's dispute settlement system. We have won important victories that will improve the access of our beef exports to Korea and, I am confident, remove the quite unjustified safeguard measures imposed by the United States on our lamb exports.
APEC remains the peak organisation of the Asia Pacific region. It continues to struggle with the challenge of an internal trade liberalisation agenda. However APEC remains a critical player in expressing the region's trade and economic priorities. We will continue to argue that APEC should lend its substantial weight to the early launch of a new trade round. It has also embarked on an important trade facilitation and capacity building program aimed at freeing up the movement of goods, capital and people among its members.
We are also actively pursuing bilateral and regional free trade agreements, wherever we see solid and practical gains that can be delivered more quickly than through the WTO.
I expect such benefits in due course from our negotiations with Singapore. I hope, too, that the results of a study we are about to begin with Thailand will lead to negotiations for a free trade agreement. We will continue to deepen our very close economic partnership with New Zealand.
The government has proposed to the United States that our two countries negotiate a free trade agreement. This would add an economic dimension to the strong security ties between us. Both our economies are largely open, although we both have areas of sensitivity. But I believe that a worthwhile agreement could be achieved, one that would improve our access to each other's markets and that would be a positive example to others.
We recognise that the timing of such a negotiation will need to take account of a complex and multifaceted trade strategy currently being developed by the new US administration. I look forward to putting these points to President Bush during our forthcoming discussions.
In the case of Japan and Korea, where protection of politically sensitive agriculture makes it difficult to pursue free trade, the government has developed a different approach. A trade and investment facilitation agreement with Japan, as we have proposed, could produce real benefits beyond the traditional area of tariffs - in standards, electronic commerce, investment and services. With Korea, we will soon be finalising parallel studies on a Strengthened Economic Partnership between our two countries, and examining specific recommendations on how to broaden this key trading relationship.
Conclusion
Ladies and Gentlemen:
Our world is framed by the forces of globalisation. Liberated from the strictures of the Cold War, it is less threatening but less certain. Our own region is one characterised by change, and to some extent, unpredictability.
These are not however tendencies to fear, so long as you have the credentials and institutions to deal with them.
Australia stands poised, not merely to survive in this environment, but to prosper.
Our economy is flexible and resilient. Our national political, legal and financial systems are transparent and robust. Our foreign and trade policy goals are clear and focussed on the national interest. Our political and diplomatic resources are substantial, appropriately deployed, and internationally respected. We have strong alliances and healthy bilateral relationships. We have a military force capable of defending our shores if necessary, and of contributing to the security of our region.
And our people remain, as always, our greatest resource.
We understand the challenges of our environment, and have the capacities and the confidence to succeed.